Michael Ejercito
2018-06-18 11:44:08 UTC
http://www.jeffjacoby.com/21284/leave-google-alone
Leave Google alone
by Jeff Jacoby
The Boston Globe
June 17, 2018
SHOULD THE GOVERNMENT break up Google, as it broke up Standard Oil and AT&T,
for being a monopoly too big to tolerate? Let's consider that question as we
take a stroll down memory lane.
•In March 1998, Fortune Magazine chronicled the rise of a mighty tech giant,
an online powerhouse it described as "the biggest star in the Internet
cosmos." The headline on the piece: "How Yahoo! Won The Search Wars." So
popular and wealthy had Yahoo! become, Fortune noted, that "some people say
it's the next American Online."
•Nine years later, The Guardian reported on the Internet's number one
social-media platform, the most-visited website in America. "Will MySpace
ever lose its monopoly?" it asked, strongly suggesting the answer was no.
MySpace's user base, massive and fast-growing, was "becoming what economists
call a 'natural monopoly,'" said The Guardian. "It may already be too late
for competitors to dislodge MySpace."
•The following December, Forbes celebrated the undisputed Goliath in mobile
communications. On the magazine's cover was a picture of a confident CEO
holding one of his company's telephones to his ear. The headline was just as
cocky: "Nokia. One Billion Customers — Can Anyone Catch The Cell Phone
King?"
A chorus of critics has been sounding alarums lately about the monopoly
power of Big Tech corporations like Google, demanding that the federal
government bring antitrust prosecutions to clip their wings or split them
into smaller firms. These latter-day trustbusters claim that Google uses its
outsize market power to stifle competitors and suppress innovation, that it
jiggers its search algorithms to boost its own products over its rivals',
and that its staggering dominance has rendered it too big to be tamed
through the normal resiliency of the market.
But the notion that government intervention is needed to cut Google down to
size is utterly misguided.
If there is an immutable lesson to be learned from the history of market
economics and corporate power, it is that kings of the hill don't reign
forever. Supposedly invulnerable businesses are challenged by nimble
upstarts with disruptive ideas. They lose market share as customers' tastes
change. They fail to adapt because success makes them overcautious.
Just ask the titans from our stroll down memory lane. Yahoo! is now far from
"the biggest star in the Internet cosmos." MySpace long ago lost its
social-media monopoly. Nokia's billion customers migrated to Apple and
Android.
Similar fates befell AOL and Blackberry and Palm. Web browser Netscape gave
way to Internet Explorer, which gave way in turn to Firefox and Chrome.
Hotmail was deposed by Gmail. Now iTunes is being pushed back by Spotify and
Amazon Prime.
There are no perpetual market leaders in business. Sooner or later, every
Goliath is displaced by a David. Unless history has ended, that goes for
Google, too. And it won't require government intercession to make it happen.
Much is made by the antitrust enthusiasts of Google's overwhelming supremacy
in Internet search. "Google has succeeded where Genghis Khan, communism, and
Esperanto all failed: It dominates the globe," wrote Charles Duhigg in a
recent New York Times Magazine essay. In the United States, Google accounts
for about 87 percent of search engine activity. Since it has competitors
(quite a few, in fact), it isn't literally a monopoly — it dominates the
search market, but doesn't control it absolutely.
Even using the term colloquially, though, Google is a "monopoly" only in its
corner of the Internet playing field: search engine advertising. That is
certainly an important corner, but it isn't the whole digital universe. It
isn't even the whole search universe.
Nine out of 10 people may "Google" when they want to know where Timbuktu is
or see pictures of Meghan Markle's wedding dress. But for the soaring
population of online shoppers, Google is no longer the leading search
destination. Amazon is. As of December 2016, Amazon was the starting point
for 52 percent of product searches, up from 38 percent just two years
earlier. A charge frequently levied by the break-up-Google crowd is that the
company unfairly boosts its own Google Shopping search results over those of
other price-comparison sites. Yet even if that represents an abuse of
Google's economic clout — a highly debatable "if" — it's an abuse that
matters less and less as Google gets squeezed out of shopping-related
searches.
Already there are those who speculate that Google's power has peaked. If it
hasn't, it will. As marketing industry journal Ad Age reported in January,
"Google's share of search ad revenue is declining and will continue to erode
each year."
Google is no Standard Oil or AT&T. Unlike those 20th-century hegemons, it is
in a nonstop fight against formidable rivals for customers, revenue, and
market share.
As recently as 2007, Nokia was the undisputed "cell phone king." Now it's no
more than a bit player, having been displaced by the iPhone and Android.
Search is only one area in which Google faces pressure from the other tech
giants. Google Docs is challenged by Microsoft Word and Apple Pages;
Google's Android battles the iPhone; Google Assistant competes with Amazon's
Alexa. And in the burgeoning market for cloud computing, Google is hardly
more than a bit player .
None of this adds up to a case for prosecution. Google is big, but the
purpose of antitrust law isn't to curb bigness. It is to protect consumers
from harm. And Google, far from hurting consumers, has showered them with
gains.
Google gives away its foremost product, Internet search, for free. Ditto
most of its hundreds of other products, from Gmail to Translate to Google
Earth to Waze. It plowed $14 billion into R&D last year, more than any
company in America except Amazon. Of the brands Americans love most,
according to Morning Consult's authoritative polling, Google is number one.
Yes, Google's left-wing bias can be obnoxious; it seems clear that its
search results often skew against conservatives. But to target a private
corporation because of its politics is something no conservative should
favor. This conservative certainly doesn't.
If the consumer's best interest is the standard, the case for breaking up
Google is nonexistent. There will be time enough to cry "Monopoly!" and let
slip the dogs of antitrust when there is evidence that Google injures its
users or is immune to market discipline. Long before that day arrives,
however, Google will have taken its place as just another attraction along
memory lane, a once-mighty corporation that was king of the hill — until it
wasn't.
(Jeff Jacoby is a columnist for The Boston Globe).
---
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Leave Google alone
by Jeff Jacoby
The Boston Globe
June 17, 2018
SHOULD THE GOVERNMENT break up Google, as it broke up Standard Oil and AT&T,
for being a monopoly too big to tolerate? Let's consider that question as we
take a stroll down memory lane.
•In March 1998, Fortune Magazine chronicled the rise of a mighty tech giant,
an online powerhouse it described as "the biggest star in the Internet
cosmos." The headline on the piece: "How Yahoo! Won The Search Wars." So
popular and wealthy had Yahoo! become, Fortune noted, that "some people say
it's the next American Online."
•Nine years later, The Guardian reported on the Internet's number one
social-media platform, the most-visited website in America. "Will MySpace
ever lose its monopoly?" it asked, strongly suggesting the answer was no.
MySpace's user base, massive and fast-growing, was "becoming what economists
call a 'natural monopoly,'" said The Guardian. "It may already be too late
for competitors to dislodge MySpace."
•The following December, Forbes celebrated the undisputed Goliath in mobile
communications. On the magazine's cover was a picture of a confident CEO
holding one of his company's telephones to his ear. The headline was just as
cocky: "Nokia. One Billion Customers — Can Anyone Catch The Cell Phone
King?"
A chorus of critics has been sounding alarums lately about the monopoly
power of Big Tech corporations like Google, demanding that the federal
government bring antitrust prosecutions to clip their wings or split them
into smaller firms. These latter-day trustbusters claim that Google uses its
outsize market power to stifle competitors and suppress innovation, that it
jiggers its search algorithms to boost its own products over its rivals',
and that its staggering dominance has rendered it too big to be tamed
through the normal resiliency of the market.
But the notion that government intervention is needed to cut Google down to
size is utterly misguided.
If there is an immutable lesson to be learned from the history of market
economics and corporate power, it is that kings of the hill don't reign
forever. Supposedly invulnerable businesses are challenged by nimble
upstarts with disruptive ideas. They lose market share as customers' tastes
change. They fail to adapt because success makes them overcautious.
Just ask the titans from our stroll down memory lane. Yahoo! is now far from
"the biggest star in the Internet cosmos." MySpace long ago lost its
social-media monopoly. Nokia's billion customers migrated to Apple and
Android.
Similar fates befell AOL and Blackberry and Palm. Web browser Netscape gave
way to Internet Explorer, which gave way in turn to Firefox and Chrome.
Hotmail was deposed by Gmail. Now iTunes is being pushed back by Spotify and
Amazon Prime.
There are no perpetual market leaders in business. Sooner or later, every
Goliath is displaced by a David. Unless history has ended, that goes for
Google, too. And it won't require government intercession to make it happen.
Much is made by the antitrust enthusiasts of Google's overwhelming supremacy
in Internet search. "Google has succeeded where Genghis Khan, communism, and
Esperanto all failed: It dominates the globe," wrote Charles Duhigg in a
recent New York Times Magazine essay. In the United States, Google accounts
for about 87 percent of search engine activity. Since it has competitors
(quite a few, in fact), it isn't literally a monopoly — it dominates the
search market, but doesn't control it absolutely.
Even using the term colloquially, though, Google is a "monopoly" only in its
corner of the Internet playing field: search engine advertising. That is
certainly an important corner, but it isn't the whole digital universe. It
isn't even the whole search universe.
Nine out of 10 people may "Google" when they want to know where Timbuktu is
or see pictures of Meghan Markle's wedding dress. But for the soaring
population of online shoppers, Google is no longer the leading search
destination. Amazon is. As of December 2016, Amazon was the starting point
for 52 percent of product searches, up from 38 percent just two years
earlier. A charge frequently levied by the break-up-Google crowd is that the
company unfairly boosts its own Google Shopping search results over those of
other price-comparison sites. Yet even if that represents an abuse of
Google's economic clout — a highly debatable "if" — it's an abuse that
matters less and less as Google gets squeezed out of shopping-related
searches.
Already there are those who speculate that Google's power has peaked. If it
hasn't, it will. As marketing industry journal Ad Age reported in January,
"Google's share of search ad revenue is declining and will continue to erode
each year."
Google is no Standard Oil or AT&T. Unlike those 20th-century hegemons, it is
in a nonstop fight against formidable rivals for customers, revenue, and
market share.
As recently as 2007, Nokia was the undisputed "cell phone king." Now it's no
more than a bit player, having been displaced by the iPhone and Android.
Search is only one area in which Google faces pressure from the other tech
giants. Google Docs is challenged by Microsoft Word and Apple Pages;
Google's Android battles the iPhone; Google Assistant competes with Amazon's
Alexa. And in the burgeoning market for cloud computing, Google is hardly
more than a bit player .
None of this adds up to a case for prosecution. Google is big, but the
purpose of antitrust law isn't to curb bigness. It is to protect consumers
from harm. And Google, far from hurting consumers, has showered them with
gains.
Google gives away its foremost product, Internet search, for free. Ditto
most of its hundreds of other products, from Gmail to Translate to Google
Earth to Waze. It plowed $14 billion into R&D last year, more than any
company in America except Amazon. Of the brands Americans love most,
according to Morning Consult's authoritative polling, Google is number one.
Yes, Google's left-wing bias can be obnoxious; it seems clear that its
search results often skew against conservatives. But to target a private
corporation because of its politics is something no conservative should
favor. This conservative certainly doesn't.
If the consumer's best interest is the standard, the case for breaking up
Google is nonexistent. There will be time enough to cry "Monopoly!" and let
slip the dogs of antitrust when there is evidence that Google injures its
users or is immune to market discipline. Long before that day arrives,
however, Google will have taken its place as just another attraction along
memory lane, a once-mighty corporation that was king of the hill — until it
wasn't.
(Jeff Jacoby is a columnist for The Boston Globe).
---
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https://www.avg.com
